After a “horrid" second half of 2013 and a bitter three-year court battle that almost tore the sector apart, Australia’s independent cinemas are coining it in at the box office, with growth outperforming the big chains by about nine ­percentage points since Boxing Day.

According to industry figures published by Rentrak and obtained by AFR Weekend, the take for 220 independent cinemas is up 4 per cent year-on-year at $36.2 million from December 26 to Thursday, while major cinemas’ takings have slid 5 per cent to $86 million.

Benjamin Zeccola
, chief executive of Palace Cinemas, put the performance down to a rush of “quality movies" such as Frozen, The Secret Life of Walter Mitty, The Book Thief, starring Geoffrey Rush, and Oscar nominees American Hustle and Philomena.

“Quality movies like Philomena and The Book Thief naturally do better in quality indie locations as both the films and the venues appeal to a more mature AB audience," Mr Zeccola said.

Other cinemas performing well – and benefiting from punters seeking shelter from the heatwave – include those in the Dendy chain, the Cremorne Orpheum in Sydney, Luna Palace Cinemas in Perth, and the Sun in Yarraville, Melbourne.

The Sun’s owner,
Michael Smith
, said that after a dearth of quality titles last year, the current rush of pre-Oscar movies were perfect fodder for boutique movie theatres with liquor licences and quality food.

“The second half of last year was very tough particularly in country locations. It was horrid to be honest. We were really struggling from week to week to get through; the product wasn’t dragging people out," Mr Smith said. “But since November people are coming out again and last month has been superb."

Golden age for the Golden Age

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In August of last year,
Bob Barton
, his brother Barrie and their business partner Ping Jin Ng opened 60-seat movie theatre Golden Age Cinema and Bar in Sydney’s increasingly fashionable Surry Hills in August last year, ­luring well-heeled hipsters and movie buffs with cheese plates and ice-cream by Messina.

The team, which started Rooftop Cinema in Melbourne in 2006, refurbished the old screening room of ­Paramount Pictures, which was once used to screen news and information from the front during World War II.

“With both ventures the aim was to bring back a bit of magic to cinema-going and make it a social occasion which has been lost with megaplexes," Mr Barton said. “Even in age of free downloads there is a great difference between sitting on the couch watching a flick and sharing a great moment with whole group of people all laughing."

The partners launched Golden Age as a digital cinema and could afford to do so because of the small size of the theatre. Until recently the conversion from film to digital, the biggest change in movie theatres in 80 years since the “talkies", had threatened to put many independent cinemas out of business.

With 35 millimetre film reels being replaced by encrypted hard drives, ­cinemas faced costs of up to $100,000 a theatre to convert. Hollywood provided incentive payments to individual cinemas to do this, but required all such claims to be made through a central administrator. The Sun’s Mr Smith was involved in arranging for independent cinemas in Australia to switch from analogue equipment to digital.

A federal court judge held in 2011 that Mr Smith had diverted negotiations about the incentive payments from one company to another in breach of his fiduciary obligations to the first company. His appeal against this decision failed. During a further hearing on the amount of damages he and the ­second company should pay to the first company, the parties reached an agreement and the matter was settled.

Mr Smith said: “I’m glad it’s behind me. The case was very disappointing and I’m glad it was dismissed after we were able to reach an out-of-court settlement. It was a dark period for the industry and we are moving forward."